Q: can os on 2006 iMAC be updated?

Click here, install the DVD, run Software Update, open the Mac App Store, and try purchasing Mountain Lion. If you get told it's incompatible(you will on a 2006 Core 2 Duo iMac), phone the online Apple Store and order a download code for Lion.

(85043)

Yes. See the following options. You cannot update to Mountain Lion but you can update to Snow Leopard or Lion. I would recommend at least updating to Snow Leopard if you meet the other requirements. It's not necessary to update to Leopard first.

Upgrade Paths to Snow Leopard, Lion, and/or Mountain Lion

Upgrading to Snow Leopard

You can purchase Snow Leopard through the Apple Store: Mac OS X 10.6 Snow Leopard — Apple Store (U.S.). The price is $19.99 plus tax. You will be sent physical media by mail after placing your order.

After you install Snow Leopard you will have to download and install the Mac OS X 10.6.8 Update Combo v1.1 to update Snow Leopard to 10.6.8 and give you access to the App Store. Access to the App Store enables you to download Mountain Lion if your computer meets the requirements.

     Snow Leopard General Requirements

       1. Mac computer with an Intel processor

       2. 1GB of memory

       3. 5GB of available disk space

       4. DVD drive for installation

       5. Some features require a compatible Internet service provider;

           fees may apply.

       6. Some features require Apple’s iCloud services; fees and

           terms apply.

Upgrading to Lion

If your computer does not meet the requirements to install Mountain Lion, it may still meet the requirements to install Lion.

You can purchase Lion by contacting Customer Service: Contacting Apple for support and service — this includes international calling numbers. The cost is $19.99 (as it was before) plus tax.  It's a download. You will get an email containing a redemption code that you then use at the Mac App Store to download Lion. Save a copy of that installer to your Downloads folder because the installer deletes itself at the end of the installation.

     Lion System Requirements

       1. Mac computer with an Intel Core 2 Duo, Core i3, Core i5, Core i7,

           or Xeon processor

       2. 2GB of memory

       3. OS X v10.6.6 or later (v10.6.8 recommended)

       4. 7GB of available space

       5. Some features require an Apple ID; terms apply.

Are my applications compatible?

         See App Compatibility Table — RoaringApps.

With your model iMac, you can upgrade the OS as far as OS X 10.7 Lion.

However, your iMac model only supports  up to 4 GBs of RAM.

OS X 10.7 and 10.8 need at least 3-4 GBs of RAM, for itself alone.

This doesn't leave a lot of RAM for any other applications that need to run.

My advice is that you can upgrade to OS X 10.6 Snow Leopard, update to OS X 10,6.8 and update all of your other apps and stay there.

Because your iMac model is nearly 7 years old,

You'll see a big performance hit if you upgrade this iMac to OS X 10.7 Lion.

Your iMac will run fine with max'd out RAM of 4 GBs running OS X 10.6.8 Snow Leopard.

Good Luck!

Snow Leopard is recommended if you need access to pre2006 Mac applications.  Lion does not slow down my 20" iMac of the same vintage, but then again, I keep at least 15% of the drive free, and don't use any cache cleaning utilities, or other utilities which may slow down the Mac.